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Mad Money

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01:01:00

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Jim 11, Ibm 11, Cramer 8, Cisco 6, Exxon 5, Warren Buffett 5, Pfizer 5, Us 4, Amazon 4, At&t 4, Graham 3, Florida 3, Caterpillar 3, China 3, Goldman 3, Groupon 2, Karen 2, Goldman Sachs 2, Stafford 2, Pennsylvania 2,
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  CNBC    Mad Money    News/Business.  (2013) New.  

    December 2, 2013
    6:00 - 7:01pm EST  

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>> yes. i'm sad to part with some of my macy's. it's time to take money off the table. >> identify risk reward. i think it sets up well. >> all right. thanks so much for watching. see you back here. don't go anywhere. mad money 5:00 for more "fast." don't go anywhere. "mad money" with jim cramer starts right now. my mission is simple, to make you money. i'm here to level the playing field for all investors. there is always a bull market somewhere, and i promise to help you find it. "mad money" starts now. hey, i'm cramer. welcome to "mad money." welcome to cramerica. other people want to make friends. i'm just trying to safe you a little money. my job is not just to entertain you, but to educate you. so call me at 1-800-743-cnbc. leave it to twitter to produce the ultimate question that is defining this stock market. including today where the dow sank 78 points.
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s&p back 7.2%. at jim query, would you buy amazon here? my quick response, two very different questions, yes and no. that's right. yes, i would buy amazon. no, it's not worth $400. welcome to the world of bull market discipline. the discipline to buy stocks that aren't cheap but are right. a discipline that will be tested in the next few days. at last because of today's last hour 7 sell-off -- >> sell, sell, sell! >> that shook people out of their complacency. i'm talking about the rigger to recognize what the market actually wants, though, not necessarily what you want. the dichotomy says you would rather have a portfolio that is hated and making money than be bound by concerns that may not be as relevant as they should be. let's start with amazon, which hit at an all-time high today, $399 before being repelled along with many other stocks by waves of afternoon selling.
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this weekend on the most watched news program in america i called it a terrific advertisement for amazon. it was incredible. a film about an amazon octocopter, a aerial drone that delivers five-pound packages to your door. the delivery system for the future that was right out of the jettisons. there was only one issue, though, it wasn't an advertisement. it was a news story about how dedicated amazon is to getting you the products you want. wouldn't you know it, the piece prompts me to go to amazon where i order my kids a couple of fitbits for the holidays. i interviewed the ceo of fitbit a few week ago and decide to shop at small businesses this weekend in summit, yet not one sporting good store carried them and the bike shot never heard of them. of course amazon not only had it, they had the lowest price. i was content to let ups deliver it, although i would would like to have a domino's pizza delivered by drone.
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you can buy amazon the stock if you recognize it will bring you the best goods at the cheapest price for the least amount of hassle. while i was at it, i was debating gives my kids amazon prime as well as a new kindle. and even a credit card for the rewards program. i never even care about rewards, but here they come to you. and you can use them so easily. so why not? but now how about the second question. is amazon worth $400? no. no. by any traditional metric, absolutely not, including today's trading when the stock went to $39. but look, you have to put yourself in someone else's shoes. if you're a growth manager, amazon may actually be cheap at any price. the company seems indifferent to make or losing money. it's expanding so fast that it almost seems to be telling wall street go noodle over price earnings ratios, trying to pin a price down. what is the price of being the only worldwide ecommerce play that can make a fortune when it
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wants to to? for these managers, that's the first pillar. don't worry about what it costs you. and that is amazon to a tee. i'm telling you got to put yourself in their heads. second, now you can scoff at momentum, but this morning goldman sachs raised its price tag from $400 to $450 siting accelerating growth in worldwide opportunities. anyone who is traditional says goldman is playing the momentum game of a stock that overrode the price target so asks for some lamo reason to price the target. i see the price target bump, but how about if you own the stock. you start thinking why should i sell it? if amazon is 56% gain this year, who the heck wants to let it go, pay the taxes? why would you? you would have a humongous tax bill brought on by yourself, and so far not many losses do. if you're an institution, you want to show your clients that you own it. that makes the stock blessed. third, unlike most of the bricks and mortar outfits out there, amazon does have a real mystery.
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the possibly of a lights out quarter could be in the cards. walmart and target keep going down. finally, when it comes to the worth of amazon, there is a simple answer you can get. it's worth what people will pay for it. the answer is they'll pay $400, or $178 billion for the stock where it was trading this morning before the pullback. that's when the discipline comes in. as i've been saying for a while now, you have to recognize that the idea of a bubble in stocks has kept you out of so many winners that it's just unforgivable. if you're a performance manager. look, i can't blame anyone for wanting to sell amazon, or so many other stocks for that matter based on valuation. i know it's way too expensive for my charitable trust. we're not going to do that. but this weekend also on twitter someone ridiculed me for going against the canonical treaties on stocks, security analysis by graham and dodd, as well as warren buffett, who the tweeter said is a disciple of that school fund. i said go read it. actually go read this book. if you read security analysis you would never by a single
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stock, not one, not one in this market. the whole idea of graham and dodd is to buy a stock that is cheap in absolute terms, not relative once. trust me, that made a lot more sense in 1934 when the book was published right in the middle of the great depress. you had some once in a lifetime bargains back then. warren buffett, look at his portfolio. does ibm fit the pattern? no. exxon? they're both very expensive. amazon is not growing at all which makes it incredibly rich. that doesn't mean -- i have no interest in owning ibm because it has no growth. but exxon just had a terrific quarter and right now it is the best in the group, a total irony. more on those two later. as for amazon, it's rivaled only by elon musk duo, solar city and tesla. we do see stretch valuations everywhere. a whole list of analysts brought out twitter and a bunch wanted to buy it on a reasonable valuation in the out years if
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everything goes right. merrill lynch launched the stock with a sale. merrill chose to use traditional security analysis and found the stock wanting. the others didn't, though. and we have a real case being made for the stock that i think is incredibly expensive by any stretch of the imagination and should be sold. but that's the kind of launching that propelled amazon to nearly four po hundred dollars this morning. again, logic, compelling. if you're a growth manager, and many are, in this stock amazon fits your growth portfolio. that encompasses the rigorous discipline i'm describing. i'm saying i can recognize what a very important cohort of money managers wants to do, which is buy the fastest growing stocks. i can recognize that in a low growth world, the high growth ethos will attract the most money in. the growth oriented managers are not bound by traditional methods of valuation that you and i are think are right. they're the marginal buyers of stocks up here. they control the prices, and they decided in their wisdom that many years from now amazon will look very cheap at these levels. are they wrong? that's not the central question
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now. it's not what matters. what matters is that you recognize their bull case, and that their determining price is here, right now. and if you're nimble, you can mimic them successfully if you're willing to be chameleon-like in the name of performance, somethingy see happening from now until the end of the year. in other words, if you think graham and dodd is the only form of discipline, then i ask what is that worth to you? what has that made you? isn't it a discipline that makes you more than a discipline that doesn't? good question, right? here is the bottom line. this business is about making money, not having the most elegant theory. and at the end of the day, that's the real reason that these guys own amazon. you don't have to do it, but at least understand why they do. pat in new york, pat? >> caller: hi, jimmy cramer. how you? >> choking, but fine. how you? >> caller: boo-yah. i'd like to thank you for all of the advice you have given us in helping us to make a few dollars now and then. >> thank you. thank you. >> caller: i heard something today about groupon being changed from a buy to neutral.
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what do you think about that? >> i don't know. it was a downgrade based on valuation. i think groupon is making a comeback. but remember, this stock has just gone up mightily. and now it's starting to slip back. and i think there is guys, there is a lot of analysts out there frankly who are like the 3m downgrade today, they don't want to get caught with stocks going down without them ringing the register. that was a ring the register downgrade. i see nothing wrong with groupon team. i think they're getting together. i think the stock can trade back to its high. stafford in oregon, stafford? >> caller: hey, jim how. you doing today? >> well, chip kelly made me happy. how about you? >> caller: i'm doing okay. >> good. >> caller: i want to get your thoughts on china mobile phone. i know the rumor is with apple december 18th. >> china's gotten hot again, but they're going to do a lot of ipos. that was the story over there. my charitable trust bought apple today. why? because i think it's going to be an apple holiday season with the tablet. now, remember, today was a nasty end of the day. and i think a lot of people are going to really take their cue from the end of the day, not the beginning of the day.
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more on that later. but i need you to understand why people do buy amazon. not in my trust. it doesn't have to be in yours. but at least understand why they buy. i'm here to help you see the forest through the trees. or the drones through the drone. and amazon's got both cases. oh, you know, again, i want to point out. trust doesn't own amazon. just trying to explain why it's near $400. "mad money" will be right back. coming up, forget the fowl. it's time to leave the leftovers behind. cramer is serving up the freshest ideas for the rest of 2013 and beyond. this year's ipo market has been red hot. but these offerings may still offer plenty of opportunity. from the grocery aisles to the open seas, find out which stocks could still soar. and later, comeback cash? it's been a big year for the markets, but not every stock is sharing in the health.
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big names like caterpillar and at&t are lagging the averages. can you cash in as they catch up? find out if this is your chance to dig in, or if they can continue to stay disconnected from the rally. plus best of breed? cramer's got more for you to be thankful for. pfizer's animal care spin-off took the sticker by storm after its ipo. is the recent pullback from its highs a sign that i has moved into the doghouse, or is the bark worse than the bike? find out in cramer's exclusive. all coming up on "mad money." don't miss a second of "mad money." follow @jimcramer on twitter. send jim an e-mail to madonna money@cnbc.com. or give us a call at 1-800-743-cnbc. miss something?
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you you all know that the ipo market has been absolutely on fire in 2013.
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tons of fresh-faced companies give you enormous gains on their first day of trading. but after the dust has settled and the initial wave of euphoria has ended, how many of these companies are still worth owning? which of the 2013 class of ipos can still be bought? while the rest of you were gobbling down leftovers, i was sifting through this year's deals to find new names that are still attractive buys. tonight i've got six great ones for you. oh, but believe me, i would have been doing the leftover thing too, but our oven broke, our turkey never cooked. my sister ended up dispatching me to whole foods to get the last four turkey breasts in philadelphia that we then had to microwave. nothing left over. anyway, let's get serious. first we have an terra resources, ar. a natural gas play with high quality holdings in the marcellus chehalis. it gives a nice 18% pop jumping from $44 to open at 54 and change. nearly three months later, an terra is only trading above 50%
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above its opening day price. i'm not a fan of natural gas producers in general as we're in the middle of a nasty gas glut. but the company has tremendous growth in the most recent quarter. it grew 128%. that's its production. next year they could deliver another increase in production. plus antero is very, very high quality acreage in the utica shale. we visited there and it's terrific. they have a midstream business that management plans to spin off as a master limited partnership in order the raise more funds for drilling. this is an ipo that hasn't run too much and i think can still be bought. it does remind me a lot of category, capital oil and gas, a huge play on pennsylvania natural gas. next up we have another oil patch ipo that has been hammered since it came public. a lot of people have been asking me about it, frank's international, probably the hottest stock. it's a global initiative oil service company that is one of the market's leaders in casing pipe and production tubing. two things that drillers can't
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do without, and deep water drillers need in enormous quantities. frank's went public with a bank in august shooting up 98% on the first day of trading. right up until last month. after the quarter, frank's got slammed, dropping like a rock from $30 to now a point 1/2 above where it came public. what went wrong here? franks missed out of the shoot in the first quarter as a publicly traded company. and that is an absolute no-. no frank's deep core water tubing business which accounts for nearly two-thirds of the company sales was terrific, on fire. but the u.s. onshore business got hit hard. this is an area where the whole oil service complex is having a tough time, including halliburton, because there is too much competition. franks had a key order pushed out to the first half of 2014. but they still recognize the expenses which caused the u.s. onshore margins to get crushed. however, that's very much i think a one-time problem as the company will be able to start recognizing delayed revenues from the order next year. and frank's is in a duopoly with
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weatherford, one of my least favorites in the oil and casing market. i think it can work higher than the expectations have been reset and the analysts are starting to agree. morgan stanley upgraded the stock today. i would buy this one. there aren't many stocks that are down this year. it's possible you can see selling right into the end of the year. i think the best course here is buy some frank's on a weakness. third buyable ipo, oh, i like this one, norwegian cruise line holdings. that's nclh. norwegian came public in january. soared 35% in the first day of trailing. rallying another 6.7% in the after market. this is the third largest cruise line, unlike the two giants carnival and royal, they're a real growth company. they have 12 ship, three more vessels in the pipe that will grow 40% over the next few years. norwegian is the best ornt in the industry with the highest margins, highest net revenue, which is key.
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plus, the company has been cleaning up its balance sheet and only selling for 19 times next year's earnings. it has 40% long-term growth rate. now norwegian cruise tonight announced the secondary after the close. i think you should put in for some shares. i think you're going get this one as a discounted price. this is the best opportunity of all six. next up, i like pinnacle foods. this is a company whose brands like bird's-eye, hungryman, duncan heinz, mrs. butterworth, they're found in 85s% of all household. since then the stock has a 23% gain in the after market. i told you to buy this one ahead of the ipo, and reiterated, my trust put in a real nice gain. i still think there is a room for gain. they acquired neglected brands and turn them around. a la cramer favorite b & g foods. wishbone foods from unilever for $580 million. this company has a winning formula. what more can you ask for?
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fifth 2013 ipo still worth buying, no one is talking about this one volaris. a low cost mexican airline. this is kind of like a mexican version of spirit, symbol save. they came public in september, jumped 16.8% on the first day. since then the stock has barely budged. oil has come down big. the company is growing like a weed and 43 planes, management plans to double that, adding another 49 over the next eight years. mexico is a lot like the united states when it comes to the airlines. there has been massive consolidation, four player downs there control 96% of the market that means competition. the mexican economy is coming on strong. while cheap educated labor and nafta are bringing in a host of german and japanese manufacturers. and they fly to many of the towns where the new plants are being built. management assures me there are
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going to be many more smaller airports covered soon. they are so cheap they can compete with the bus lines, which is the way most people get around in mexico. this stock is a buy. last but not least, let me draw your attention to a new one. navigator holdings. nvgs. you often see wilbur ross on squawk. this transports liquefied petroleum gases like propane and butane, along with petrochemical gases like ethylene and propylene. navigator just came public two weeks ago. since then the stock has rallied another 5%. production in these quitified petroleum gases is rising rapidly in the united states, as you know, because we talk about it all the time and there is a big demand in east asia and europe. right now 23 handy-sized ships, with another eight ships on order there is real growth here, and what makes me more confident is the fact that navigator managed to stay profitable during the great recession. that said, 39% of navigator's vessels are in the stock market.
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for the rain the day rates plummet, the stock will be get hammered. there is some risk here. but i think it's worth it. time to circle back from the class of 2013 that have the most upside. you go with antero resources, norwegian cruise, don't forget the secondary tonight, pinnacle foods, volaris, the mexican airline company and you can buy frank's international on weaks. by the way, we're on the lookout four more new names. if you want to suggest others, please go to @jimcramer on twitter and tell us which ipos you would like to know more. let's go to cody. >> caller: boo-yah from sunny south florida. >> hey, what's up? >> caller: zoom symbol xxom. this has a nice run-up to 36, had a pullback to 30 and then continued to decline to 27. and it has just been trading sideways for over five weeks now. and i wanted to get your opinion -- >> that's like the internet bank. the interchange internetbank.
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you know, we were thinking about doing a piece on this. it's been kicking around on our list of stocks we're going to look at. but we didn't do the work. so i can't opine on it. but i promise i will do the homework. now, as 2013 comes to an end, you need to circle back to the names that are worth buying, and what i think can work. and that's antero, the natural gas, frank's international, damaged stock but not a damaged company. norwegian cruise, secondary announced tonight. navigator's wilbur ross, pinnacle, food rollup, and volaris, the mexican airline company. i got to tell you, i think this may be the biggest deal. after the break i'll try to make you more money. coming up, comeback cash? the rally may have skipped these stocks. but is their underperformance giving you the chance to dig in after the nonstop move higher? don't go anywhere. ya know, with new fedex one rate
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that's why tonight i want to highlight the five remaining lagers in the dow jones industrial average. the only five stocks in the index that are up less than double-digits for the year, yep, just five. in this year of incredible outperformance, ibm, caterpillar, at&t, exxon, and cisco, all well-known names are all up less than double-digits with ibm and particular down 7.35%. and all the while the dow has rallied 22%. so let's drill down with these underperformers and see what needs to be done. first of all, ibm and caterpillar, the two outright losers are outright dangerous, at least until the end of the year. this is tax law season where investors sell their losers to offset the gains they made. and people got gains galore. at a moment a few stacks are down, selling ibm and cat could be particularly brutal. once we get to 2014, there will still be plenty of more long-term problems here. ibm is being challenged by the cloud. its business is not in tune with
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the simple inexpensive nature of cloud computing. the whole watson thing, the race for the most powerful, analytical computer means nothing in this day and age. won jeopardy, sold. many companies provide excellent data analytics. you don't need ibm. ibm offers the fabled one-stop shop. but again, increasingly going a la carte, something we saw with dream force, a celebration of everything that ibm is not. accused ibm as being irrelevant and not offering companies anything close to a bargain. heavy hardware, big iron, no thank you. meantime, ibm spends much of its cash free throw flow buying back stock. it's a giant cyclical company without any real growth at all. i have to tell you if warren buffett weren't in this stock, it would probably be dramatically lower. ibm's revenues have been basically flat for four years. and all that has really happened in that time is the company has shrunk its share camp from $1.28 billion to $.89 billion.
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and the more it goes into the cloud, the worse it can be for the whole company's margin. as for the other outright loser, it's all about management. boy, their equipment is the best in the world. the $7.6 billion equation of bucyrus, and then the purchase of era for $650 million where cat almost immediately had to write off almost the entire amount because of fraud. chinese company. they didn't know. these deals are squarely at the feet of the ceo, who belongs on the "mad money" wall of shame why. ? because despite being accurate about his forecasts for the world, he has continually pumped out too much inventory in the very places his people tell him he can't sustain the extra equipment. they've got way too much inventory in all t wrong markets. plus, his competitors are doing quite well. up 31%. united reynolds, has rallied
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54%. they has still been able to increase 23%. this is all on the ceo. and i don't think this situation can be fixed until he leaves. the board, i don't know, guys. come on. you can't be this clueless. but i don't expect to it change any time soon. then at&t, the third worst. this is a tough one. at&t is a super slow growing company. huge cash flow. but this year has been a real disappointment. i think the analyst buybacks and slow dividend, they're not producing the kind of returns we expect. it too needs to do acquisition. it needs to go to europe and take advantage of low prices to truly become international again, or get into the race to buy one of the cable companies that are for sale. barring that they could go national in the home security business. it just needs to buy adt, and put that company which is down 13% for the year out of its ms. rich. that's a very good idea. it can't keep doing what it's doing because it's not growing fast enough to justify inclusion in most people's portfolios. now the 5% yield is going to keep a lot of people from
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selling. but if you want yield, there are plenty of better places to put your money there is nothing wrong with a timely acquisition to get them going. and i think the ceo understands that. i see change coming. how about exxonmobil? it's actually a buy. has run up terrifically over the last month. again, thanks to warren buffett's aggressive buy, which is pretty amazing when you consider how many shares his company has and hard it would be for any mort toll move the stock. going from $4.8 billion shares to 3.9 million right now. for years they seemed to lag in oil exploration production, but this last quarter was good. still the most respected in the oil industry. now exxon can certainly help itself further by installing natural gas filling stations at its gas stations or build new ones because it is the biggest natural gas producer in the nation. it can also get in on the export game by tieing in one one of the companies trying to export american natural gas, but i believe it could be a huge stock
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in 2014 and i would buy it aggressively. we had it this morning. didn't last. would have pulled the trigger. which leaves with cisco. despite doing a massive restructure in the previous quarter, should it have heralded a better turnaround. i still can't believe for the life of me why cisco didn't preannounce its horrendous situation, especially when you consider the drop off in forecasts for next year. i think cisco is getting its butt kicked by everyone right now. it's not fashionable to talk about it. but come on, let's be out there. we poelt spoke to palo alto the day. i believe sienna is winning the war and so is juniper. the solution? somebody's head needs to roll, specifically john chambers. hey, hey, ho ho, john chambers has to go. he has been unable to turn around the operation. the a la carte companies are crushing end solution providers like cisco. only one way out. break up the company. and that's something probably can't do. i think he'll be too stubborn.
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i think new blood would invigorate the company and bring it back into the fold of real growth technology. let him say as chairman. just like ibm and at&t, the endless buyback at high prices are doing nothing for cisco. the worst five performers are a motley crew of only exxonmobil is worth buying. but with new management that could change. unfortunately, i don't see any of those changes any time soon. can i go to clint in georgia, please? clint? >> caller: jim, i'm from atlanta, georgia. >> man, i watch a lot of sec football this week, and you have got it going down there. >> caller: it was exciting, wasn't it? >> it was a miraculous weekend. >> caller: my stock is rite aid and since the stock is up as already it is this year, where do you see it going from here, and do you think there is a possible buyout coming up? >> i don't think there is a buyout. i think you're doing this on earnings. i think rite aid has made a fantastic comeback with fantastic merchandising. it periodically gets ahead of itself. it jumped up to 6.
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it can pull back to 5.5. it remains one of my strongest buys. i like that whole industry, believe it or not. you can buy walgreens, cvs or rite aid. rite aid is the most speculative, but a really, really good situation. all right. and then there were five. the dow losers. now only two are actually down. i do see one winner, exxon can be bought. the others, they got to shake it up. stay with cramer. over the next 40 years
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the united states population is going to grow by over 90 million people, and almost all that growth is going to be in cities. what's the healthiest and best way for them to grow so that they really become cauldrons of prosperity and cities of opportunity? what we have found is that if that family is moved into safe, clean affordable housing, places that have access to great school systems, access to jobs and multiple transportation modes then the neighborhood begins to thrive and then really really take off.
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the oxygen of community redevelopment is financing. and all this rebuilding that happened could not have happened without organizations like citi. citi has formed a partnership with our company so that we can take all the lessons from the revitalization of urban america to other cities. so we are now working in chicago and in washington, dc and newark. it's amazing how important safe, affordable housing is to the future of our society.
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it ask time. it ask time. it is time for the "lightning round." cramer's buy, buy, buy, sell, sell, sell. play this sound and then the "lightning round" is over. are you ready, skee-daddy? time for "lightning round." let's start with leroy in ohio. leroy?
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sir? hello? >> caller: hey, boo-yah, jim. boo-yah. >> boo-yah. >> caller: thank you. >> quite welcome. >> caller: a few years ago, a young lady came to me and asked what i thought of a stockbroker's ideas. i told her to call you. she tried three or four times. she finally got through. you gave her the right info, and she saved a bundle. her brother, who wanted to steer the other way, lost. >> okay. >> and i appreciate you, jim. >> thank you. >> caller: for doing that. >> thank you. >> caller: well, you don't get thanks enough, son. >> thank you. >> caller: what i wanted to ask about is pir. pier 1. >> pier 1 is terrific, sir. thank you for the nice comments. it really is nice to here. boy, sometimes you slog it out. so it's great. >> buy, buy, buy!
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! >> i think pier 1 is doing a great job. he missed the last quarter. he promised us on the show he would make it back. i think he is delivering. i like the stock right here. nancy in new mexico, nancy? >> caller: boo-yah, jim. >> boo-yah. >> caller: given the recent purchase of bushnell and the issuance of additional debt, would alliant check systems atk a buy? >> i gave a speech last year at this thing called the deal conference. that is run by thestreet.com and the street. and i got to tell you something. i recommended this stock. it is now doubled. i'm p i'm not going to recommend a stock after it has doubled. that's not my stock. can i go to yvonne in california? yvonne. >> caller: boo-yah, jim, from beautiful marin county. >> it is gorgeous there. >> caller: what are your thoughts on united therapeutics? >> i don't know what is going on with that stock that it keeps going up. i know they do pulmonary vascular stuff. i don't know how it moves up to fast. i got to do work on that, because that stock has been a horse, and i never ever hear about it over than the
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"lightning round." gets to sammy in louisiana. sammy? >> caller: boo where, jim. >> boo-yah. >> caller: right here in shreveport, louisiana. i brought your money and i'm reading it. >> lsu. >> caller: what is your update on green mountain coffee roast? >> oh, green mountain? look, i thought it was good quarter. they put it in the dividend. they do the buyback. i think buy back 10% of the stock. it's going to be a good holiday season for green mountain. i like the stock. i know the controversy, but i do like the stock. can i go to karen in florida? karen? >> caller: hi, jim. thank you for your expertise. calling about annika therapeutics. >> annika, i actually use their product. this is -- this is another one. okay. this is another one which does it's a heel, bone and cartilage play. it's gone up so much, i am reluctant. again, i have to put it in the file like united therapeutics. i got to do more work how it got there. it is up gigantically.
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greg in california, greg? >> caller: boo-yah, jim. shout out from bakersfield. metrics. this company has been on a big roll. do you think it has a lot of steam? >> remember when it down, i said there was something value there. i still think there is value. i don't think it needs to be sold. let's go to allen in florida. >> caller: hi, jim. this is allen calling for florida. i would like the benefit of your extraordinary insight into the workings of the stock market, particularly about salesforce.com. in the last four quarters, including the quarter ending october 31st, crm's revenues have increased nicely be, the cost of sales, operating losses, net income losses from continuing ops, all spell to me a company out of control. >> i don't think that's fair, sir. i use operating cash flow and i use cash flow, and it's pretty terrific. that's the way i judge a big
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growth company. remember, this is a company that is trying to put on huge growth and doing it in a fashion that i find to be understandable if you go through all the financials beyond -- look, you absolutely raise good points. i'm not going against that. and i know that mark benioff, when we were out at dream force and he walks you through all the numbers, and i am a believer when he walks you through the numbers. i've been right so far to believe and i'm not backing down. let's go to steve in pennsylvania. steve? >> caller: hi, jim. boo-yah from valley forge. >> oh, man, i was there yesterday. what's up? >> caller: jim, philip morris international -- >> cool to it, sir. i tell you, that last quarter was not good. i've been a backer of philip morris ever since the split-up, but not anymore. i don't like that quarter. it showed a real definitive slowdown. and that, ladies and gentlemen, is the conclusion of the "lightning round"! [ buzzer ] >> the "lightning round" is sponsored by td ameritrade. ♪ like, really big... then expanded? ♪ or their new product tanked? ♪
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we can't we can't get enough of breakup stories here on "mad money." so tonight we want to check up on the single biggest spin off 2013. talking about zts, the animal health care company spun off by pfizer back at the end of january. riley like this one. it's the leading player in vaccines for livestock and pets,
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65% livestock. so it came public with a bang, spiking more than 19%. since then the stock hasn't done much. rallied about half a percent. it could be an opportunity. i like the story. in a world where many people seem to love their pets more than they love their children. hey, pets don't talk back, and even cats are more obedient than teenagers. new regulations and very hard to treat illnesses among the staples on our plates. last reported about a month ago, november 5th, the company delivered solid results, better than expected revenues and rose 8.2% year-over-year. much more than big pharma. the stock is inexpensive, selling 19 times next year's with 15.5% long-term growth rate. so let's take a closer look with juan ramon, the ceo of zoetis, find out more about this exciting company. welcome to "mad money." how are you, sir? >> i'm very well. >> have a seat. this is a huge, huge market you have. pets are huge, and livestock is huge. this is probably i would say
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maybe the greatest unmet need in health care today. >> agree. definitely they are very strong drivers in the industry. the population is growing. >> right. >> middle class in emerging market is also growing very fast, and it's driving the consumption of animal protein. so good opportunities. >> let's talk about the pets in brazil, russia, india, and china. that's where -- now what happens when you get a middle class, middle class families buy pets? >> definitely they adopt pets. but very important. they take care of the pets. so taken care of, the medicalize the animals, they insure that they are healthy. if you have a healthy animal at home, then it's also protecting the family. >> right. let's talk about livestock. there are many illnesses that have run through cattle, poultry, pigs. it seems like you're trying to at least vaccinate or fix or
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diagnosis all of these. >> we are doing everything. so we are providing all these products, medicines, vaccines, the devices to the veterinaryians and users to make sure that they take care of the animals. and the animals when they're healthy, they are also productive. >> now what are the -- it seems like the regulatory scheme around the world is going your way. it's not like the countries are cutting back on health care for animals, and it seems like that regulations for the care of animals are going up everywhere. >> i think we are an industry which is -- but we don't have -- >> that's the best way to put it. >> and then something that it's a business to business relationship. our customers are producers. we sell the product. they buy the products, and they buy when they see the value. >> now, i want people at home -- there is a technical name for it that we don't use. i got an itchy dog, okay? and you take the dog to the vet,
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and they put that lamp shade on the head. it's elizabethan collar. you got something that could end that. it could be approved next year. >> it's already approved. >> 2014 is the roll-out. >> right. we plan to introduce it all over the united states. >> tell how big this. this is a gigantic market. >> well, this market that is very important. it's needed today for many pet owners. it's a medical condition for dogs. very annoying and distressful to pet owners. and now we have available to veterinarians. >> so you can't buy it over the counter. you've got to go to a doctor to get it, right? >> you need to go to a veterinarian. the veterinarian assessed, will diagnostic, and they will prescribe the product. it is the product we are launching. >> i felt that zoetis was the jewel of pfizer, but they decided that this high growth
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business, higher growth than the rest of pfizer belonged stand alone. merck has not decided that. novartis has not decided that. why it is better to have zoetis separate from pfizer? >> well, first they lock significant value. >> unlock. okay. >> now we have the opportunity to create the value to the shareholders. >> but what does it mean? what are you able to get now as a separate company that you couldn't get when you were within fiezer? >> well, i would say the single focus on animal health. at pfizer they have different units, different opportunities for investment. now all the people that are working are focused on creating a value and translate this value to the shareholders. >> i think this is a great story. no third party pair alone in a world where that's all i think about now from big pharma. this is a terrific story. i want to think juan ramon alaix, the ceo of zoetis. you got to look at this stock. i spent the weekend looking at
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this thing. and i can't believe i wasn't talking about it all along. it is a great story. "mad money" will be right back. the boys are back in an all new season. thrusters at 30%! i can't get her to warp.
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losing thrusters. i need more power. give me more power! [ mainframe ] located. ge deep-sea fuel technology. a 50,000-pound, ingeniously wired machine that optimizes raw data to help safely discover and maximize resources in extreme conditions. our current situation seems rather extreme. why can't we maximize our... ready. ♪ brilliant. let's get out of here. warp speed. ♪
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you bet today got ugly. you bet today got ugly. we had a 3m drop from a wholesale at morgan stanley. that's power. that's a real shellacking. you had an ibm breakdown that is shaking even warren buffett lovers to their core.
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a brutal peripheral, open table, groupon, trulia, and goldman downgrades. yelp, linkedin, zillow, they all got whacked. so why am i not sweating the program more? i think they may be the two most important groups in the market. first, the financials act amazing there is a simple reason for that. the banks won't raise their cd rates an inch. even as interest rates creep higher. it's so far behind the market that people are grasping at anything financial, anything bank. and the sell-off didn't dim things. keep your eye on goldman sachs. in the midst of the breakdown today, goldman hit a 52-week high. that's a sign of strength, people, not weakness. i think these stocks are saying that higher rates are here to stay. th and this is one of the few days the fed didn't try or couldn't bring rate downs. that's okay. it's time they caught up with the rest of the market and they go higher when rates go higher. the other prop, it's the
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transports. the holiday season is that weak. if business is that bad in this country, then this group wouldn't be able to power higher about the way it did. i'm impressed the way fedex hung in there all day that stock was already up a lot. so was the strength in the baltic drive freight index and the transport rates for oil. watch those. raw trade is getting better, not worse. i think there was some genuine fear instigated by the downgrades there are a ton of stocks that have gone up and up and up on no real news. a simple hold could crush this gain is a reminder that many other stocks we like, like disney or chipotle or facebook all up a lot could simply be vulnerable. i think people are spooked by declining gold. for most a decline in gold means we could be another round of deflation. i think the decline in gold is a function of higher interest rates. it costs too much to borrow the money to own the no yield in gold. any time you see vicious move
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like this, it's worrisome to people. i'm totally cognizant when i looked at the charts during the halftime at the eagles game, they took my breath away. stocks are relentlessly plugged higher. and pretty much at this point i think in an unnatural way. they need to cool off for a couple of weeks. and today felt like the beginning of a cool-off. you want to know if the sell-off will last? all you have to do is pay attention to tomorrow's resurge. if we get more downgrades like 3m, and they work, and we get nor internet downgrades and they move the stock lower, we'll go lower still. but if we get buy reiterations, they might stem the decline. research is that powerful. the buyers want reassurance to keep buying, not downgrade. you know what? i think the buyer is getting away. stay with cramer. mad about "mad money"? immerse yourself into cramer's world while you watch the show with zeebox. on your phone, tablet, or on the web, get sneak peeks. go behind the scenes, and join
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the conversation. download the free app today for the ultimate cramerican adventure. in a world that's changing faster than ever, we believe outshining the competition tomorrow requires challenging your business inside and out today. at cognizant, we help forward-looking companies run better and run different - to give your customers every reason to keep looking for you. so if you're ready to see opportunities and see them through, we say: let's get to work. because the future belongs to those who challenge the present.
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go behind the scenes, and join go behind the scenes, and join i think the market is
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getting a much needed cool-off. let's hope it drifts. if you're bull, you want it to drift. if you're a bear, obviously you want it to plummet. i don't think you're going to get your way if you're a better. but i think drift down certainly would make this thing less parabolic. and i like that. i always like to team obama proclaims mission accomplished insisting the obama care website is working much better. but, is it really? only 100,000 people supposedly signed up successfully last month. we have breaking news on the continued breakdown of back-end payment-related communications with the insurance companies. in other words, all those folks who enrolled may not be enrolled. and the white house won't fess up. and none of this can hide the cold, hard fact, obama care is a bad product. its health plans cost more, provide less service and choice and it's a budget-buster for washington. you cabe